Powell, in prepared remarks, backs further slow rate hikes

WASHINGTON (AP) — Jerome Powell says that if confirmed as the next chairman of the Federal Reserve, he expects the Fed to continue raising interest rates gradually to support its twin goals of maximum employment and stable prices.

Under his leadership, Powell says, the Fed would consider ways to ease the regulatory burdens on banks while preserving the key reforms Congress passed to try to prevent another financial crisis like the one that erupted in 2008.

Powell's comments came in prepared testimony he will deliver Tuesday at the start of his confirmation hearing before the Senate Banking Committee. Powell, a member of the Fed's board since 2012, is expected to win confirmation to succeed Janet Yellen, whose term as chair expires in February.

In his remarks, Powell sought to send the reassuring message that he would represent a figure of stability and continuity at the Fed, while remaining open to making certain changes as appropriate.

On banking regulations, Powell said, "We will continue to consider appropriate ways to ease regulatory burdens while preserving core reforms ... so that banks can provide the credit to families and businesses necessary to sustain a prosperous economy."

Among those reforms, Powell mentioned the higher standards for capital and liquidity that banks must maintain under the Dodd-Frank financial reform law and the annual "stress tests" the biggest banks must undergo to show they could withstand a severe downturn.

The Fed has raised rates four times starting in December 2015, including two rate hikes this year. Economists expect a third rate hike to occur in December, and they're projecting at least three additional rate increases in 2018.

Powell cautioned that while Fed officials want to make the path of interest rate policy as predictable as possible, "the future cannot be known with certainty." For that reason, he said, it's important for the Fed to retain the flexibility it needs to adjust its policies in response to economic developments.

Powell was nominated early this month by President Donald Trump to be the next Fed chairman after a search process in which Trump interviewed five finalists, including Yellen.

Yellen, a Democrat who was nominated by President Barack Obama, announced last week that she would step down from the Fed board once Powell is confirmed to succeed her as Fed chair. Yellen could have remained on the board even after Powell became chair.